If you are planning to expand your workforce in Tunisia or considering an Employer of Record (EOR) service, it is essential to understand how the total cost of employment is calculated. This knowledge enables you to make informed decisions when budgeting and managing employment in Tunisia.
When calculating the total cost of employment for an employee in Tunisia, employers must consider several elements beyond the base salary. These include mandatory social security contributions, income tax withholdings, insurance, and additional benefits or allowances. In this article, we provide a detailed breakdown to help clients understand how the total employment cost is computed.
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Mrs. Imen Hamdi
Senior Consultant North Africa
The base salary is the agreed gross salary before any deductions. It may include fixed monthly wages, bonuses, and benefits in kind such as lodging, transportation, meals, or medical expenses, which are added to the gross salary for social security and tax calculations
Social security contributions in Tunisia are shared between the employer and the employee and cover pensions, health insurance (CNAM), family allowances, and workplace accident insurance.
Contribution Type | Employer Share | Employee Share |
Retirement, health, and family (CNSS) | 17.07% | 9.68% |
Work accident insurance | ~0.5% (varies by sector) | – |
Total | ~17.57% | 9.68% |
Social security contributions are calculated on the gross salary, including allowances and bonuses, up to certain ceilings for some branches.
Tunisia applies a progressive income tax system (IRPP) on the annual taxable income after certain deductions.
How the taxable income is calculated:
2025 income tax brackets:
Annual Taxable Income (TND) | Tax Rate |
Up to 5,000 | 0% |
5,001 – 10,000 | 15% |
10,001 – 20,000 | 25% |
20,001 – 30,000 | 30% |
30,001 – 40,000 | 33% |
40,001 – 50,000 | 36% |
50,001 – 70,000 | 38% |
Over 70,000 | 40% |
In addition, a 0.5% social solidarity contribution applies to taxable income exceeding TND 5,000 annually.
Tunisia allows specific tax deductions for dependents:
These deductions reduce the employee’s income tax liability.
Employers also contribute to two national funds:
These are calculated on the gross salary.
Employers may offer optional or negotiated benefits such as:
These benefits may be fully or partially taxable and must be factored into the total cost of employment.
Tunisia offers one of the most competitive labor cost structures in the region, making it an attractive destination for international companies looking to expand or optimize their operations. Compared to Western Europe or Gulf countries, Tunisia’s employer contributions and salary expectations are significantly lower while still providing access to a well-educated and multilingual workforce. This balance between cost-efficiency and talent availability supports Tunisia’s growing appeal as a nearshoring destination in North Africa.
As of 2025, the country’s minimum wage (SMIG) is defined as follows:
While these statutory minimum wage rates establish a legal baseline, they often do not reflect actual market salaries, especially for qualified and experienced professionals. In practice, skilled employees, particularly those in technical, managerial, or specialized roles, command significantly higher compensation. Therefore, while the minimum wage is helpful for understanding the legal floor, employers should rely on market benchmarks when planning for roles that require expertise or experience.
Starting in 2025, Tunisia has introduced a new mandatory contribution to the Economic Loss of Employment Insurance Fund. Both employers and employees are now required to contribute 0.5% of the gross salary to this fund. This new measure aims to provide financial assistance to employees who lose their jobs due to economic reasons, adding an additional layer of social protection. For employers, this contribution further increases the overall cost of employment and should be accounted for in payroll budgeting and workforce planning.
| Cost Component | Amount (TND) | Rate / Notes |
| Total Cost of Employment | 6053.50 | |
| Employer CNSS Contribution | 853.50 | 17.07% of gross salary |
| Work Accident Insurance | 25.00 | ~0.5% (varies by sector) |
| FOPROLOS (Housing Fund) | 50.00 | 1% of gross salary |
| TFP (Training Fund) | 100.00 | 2% of gross salary |
| Economic Loss of Employment Fund (2025) | 25.00 | 0.5% of gross salary |
| Gross Salary | 5000.00 | Agreed gross monthly salary |
| Employee CNSS Contribution | 484.00 | 9.68% of gross salary |
| Income Tax (IRPP) | 1165.25 | Calculated from progressive 2025 tax brackets |
| Social Solidarity Contribution (CSS) | 21.75 | 0.5% of taxable income (> TND 5,000/year) |
| Net Salary | 3329.01 |
In Tunisia, social security contributions significantly add to the total employment cost. The combined social security contribution rate for both employer and employee is approximately 26.75% of the gross salary.
Additionally, employers may pay extra contributions for occupational accident insurance, typically around 0.5% but varying by sector and risk level, which further increases the employer’s cost.
The 17.07% employer social security contribution rate in Tunisia significantly impacts hiring costs by increasing the employer’s total payroll expenses beyond the gross salary paid to the employee. This contribution is mandatory and calculated on the employee’s gross salary, including allowances and bonuses.
The increase of the employer social security contribution rate from 16.57% to 17.07% in 2025 raises the direct labor cost for companies in Tunisia by an additional 0.5% of the employee’s gross salary. This seemingly small percentage increase has several implications for payroll budgeting.
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